TCL's upcoming Sony tie-up opens opportunity to overtake Samsung in shipments

TCL's deal to take majority control of Sony's TV business in 2027 would unlock a prestigious brand, additional technical expertise and the potential to overtake Samsung as the top TV vendor by shipments.

With global TV shipments plateauing, we are likely long overdue for consolidation, but even so, it was striking to see the long-standing stalwart of high-end home theater equipment offer to cede control of a key home entertainment business.

Sony long ago dedicated itself to only the top end of the market, and that became a major liability in an era when the difference between the best and worst TVs on the shelf is negligible for the average consumer, and 65" sets can be had for less than $500.

TCL has been one of the primary forces driving prices down while equalizing the picture quality delta and has emerged as one of the top players in the process. This deal would expand its reach to the top shelf, challenging Samsung and LG in the last corner of the market where they still have a definitive edge.

TCL is one of the fastest-growing smart TV vendors among the players tracked by S&P Global Market Intelligence Kagan, with estimated shipments up 5.9% year over year in 2025 to 29.5 million units. Sony, by contrast, lost the most ground, down 7.2% to just 4.6 million units. Together, they would have easily outstripped Samsung's 31.8 million units shipped over the same period to be the top vendor in the space.

The revenue race was a different story, however, as Samsung's head start over TCL allowed it to become well-entrenched in the midrange and high-end price segments sooner. This is evident in Samsung's 2025 estimated average selling price being 2.9x that of TCL's, despite having shipped smart TVs in roughly similar volumes.

Meanwhile, TCL's rock-bottom pricing strategy allowed it to eventually catch up to Samsung in unit volume, but the resulting revenue from these shipments lagged far behind. Even the addition of Sony would fall short of bridging the revenue gap with Samsung, as Sony's high-value but marginal unit share would be heavily diluted in TCL's vast lower-value bulk, with the combined TCL and Sony estimated revenue and average selling price being barely half that of Samsung's in 2025.

We can expect to see a similar development in the US market, where Samsung's and TCL's respective shipment shares are neck and neck. As a mature TV market, the US has a larger share of premium TV shipments compared to the global average. This gave Samsung added resilience during challenging macroeconomic conditions in the past and so we expect TCL to benefit from the addition of Sony's lineup in this way to some degree.

There are other upsides for TCL: As part of the Sony deal, TCL would take 100% control of Sony Emcs (Malaysia) Sdn Bhd, one of Sony's key manufacturing plants for its home entertainment business. Presumably, this acquisition would continue producing Sony- or Bravia-branded TVs but could be repurposed for TCL-branded sets on par with top-of-the-line Bravia TVs.

The addition of Sony's TV business instantly expands TCL's presence in the premium segment, creating more opportunities to siphon away more share from Samsung and LG, hopefully to sustain TCL's current growth momentum.

Lastly, the door could be open for TCL to introduce TCLtv+, its free ad-supported streaming television (FAST) service, onto new and existing Sony- and Bravia-branded smart TV sets to generate additional platform revenue. The service is primarily served in North America and Sony's estimated smart TV installed base in the region would be a significant addition equivalent to around a quarter of TCL's North American installed base as of the end of 2025.

TCL's management of Sony's TV business, which marked its fourth consecutive year of declining shipments and revenue in 2025, is not without its drawbacks and challenges. Turning the struggling business around likely requires pulling some resources away from TCL's own TV production which could slow TCL's growth momentum for its own brands.

Most importantly, much of TCL's rapid expansion over the past decade can be attributed to its aggressive pricing strategy coupled with strategic quality compromises. This has been quite effective in the low-end and midrange price segments and has even seen some success in the premium segment, given TCL's steadily growing MiniLED TV shipments, but it could backfire and erode Sony's brand if poorly implemented in the ultra-premium price segment where quality is king.

This fundamental difference in approach between TCL's "good quality at low price" and Sony's "uncompromising quality at any cost" may prove to be the biggest hurdle for the partnership as the combined leadership of the joint venture will need to find a balance between the two ideologies.

The deal itself is not set to close until April 2027, which means that TCL is not imminently guaranteed to become the shipments leader. Furthermore, by the time the deal closes, Sony TV shipments could further decline and Samsung could find its way to higher volumes (perhaps with an acquisition of its own).

Samsung may have some levers to pull around pricing, packaging and production to maintain its market share, but it may seek M&A to bypass those tough decisions. The problem is that there are not many practical targets on the table.

We suspect steep regulatory hurdles would likely prevent a tie-up with any of the China-based vendors — such as Hisense, Xiaomi and Skyworth — in which Samsung would be the controlling interest.

And in its home market of South Korea, Samsung would be prevented from acquiring its domestic rival LG due to antitrust concerns.

Roku and Amazon, both relative newcomers to selling their own smart TVs, may be interested in a partnership that shores up their positions against the growing threat of TCL, but that may mean capitulating on a streaming operating system. We do not believe any one of those three parties would be eager to grow their smart TV operations if it meant sacrificing the long-term advertising, subscription and data brokerage revenue that comes with owning the TV's operating system.

Speaking of streaming operating systems, we would not expect the TCL/Sony deal to disrupt the existing hierarchy in that space. Sony largely carries Alphabet's Android TV as its OS, which is also a partner with TCL. We see no reason to believe those partnerships would change after the deal closes, though it may give TCL more leverage in its relationship with Alphabet.

Economics of Streaming Media is a regular feature from S&P Global Market Intelligence Kagan.

This article was published by S&P Global Market Intelligence and not by S&P Global Ratings, which is a separately managed division of S&P Global.